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March 15, 2023 at 12:29 PM ET
Homebuilder confidence rises for third straight month
From Anna Burney on CNN
(Jim Watson/AFP/Getty Images)
Confidence among home builders rose for the third month in a row, even as buyers’ mortgage rates rose.
That’s about current sales, buyer traffic, and the outlook for new home sales over the next six months, according to a March report from the National Association of Home Builders.
It was the strongest reading since September.
After turning positive in January for the first time in a year, housing construction appeared to continue to improve as construction prospects improved and inflation eased. That’s good news for homebuyers who have faced inventory shortages amid decades of nationwide building shortages.
However, recent concerns about the instability of the banking system have increased interest rate volatility and added uncertainty for builders.
Mortgage rates have risen by more than half a percentage point over the past month. But after the recent bank failures, mortgage rates have fallen as investors flock to safer bonds.
NAHB Chairman Alicia Huey said “builders are very uncertain about the near- and medium-term outlook,” despite hopes of improved mortgage rates and improved sentiment in March. .
NAHB chief economist Robert Dietz said the pressure on local banks from bank instability and continued Fed tightening will further constrain homebuilder acquisition, development and construction (AD&C) loans. rice field.
And it is finally passed on to the buyer.
“If AD&C’s lending terms are tight, lot inventories will be squeezed, adding another hurdle to housing affordability,” he said. “Cost and availability of home inventory remain critical constraints for prospective homebuyers.”
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